Is it a right time to disrupt enterprise PLM?

Timing is everything. When you want to develop a new service or change an existing one, time criteria is crucial. Is the idea way too early and the world’s not ready for it? Is it early, you’re in advance and you have to educate the world? Is the timing just right? Or is it too late, and there’s already too many competitors with similar products or services?

Timing can’t be ignored, and it can’t be substituted just by improving other elements of your business. The biggest downside – there is no process to determine the timing to develop your product. You can do market research, to hire MBA people or ask industry pundits. For the most parts, timing comes down to a gut feeling and bit of luck.

However, your customer environment plays an important role in building of your “gut feeling”. It is related to industry changes, technological trends, customer awareness, etc. TechCrunch article – The things any startup could be doing to get Fortune 500 customers speaks about a very interesting trend – investment of large Fortune 500 companies in cloud computing. The following passage is remarkable.

A study of 1,600 large enterprises published by IDG showed that 69 percent of enterprises have either applications or infrastructure running in the cloud, up from 12 percent in 2012. That’s more than 5X growth in just two years. A 2015 survey of companies with more than 1,000 employees published by RightScale shows that number at 92 percent. This is an opportunity the likes of which we haven’t seen since the PC revolution of the late 1980s and early 1990s. And many startups are taking advantage of this opportunity right now.

The following passage can give you an idea how to position new product.

But also think about categories that are of interest specifically to larger companies, like cloud security, identity and access management, compliance, document and contract management, enterprise service bus (ESB) and other middle-layer technologies. Even if your startup is going after the low-end disruption methodology, you don’t have to position it as a product with a smaller feature set at a lower price.

Position it as a product with a different feature set (and perhaps a different value proposition, too). Yes, you do not have all the bells and whistles of some huge clunky ERP system, but you offer benefits that they can’t (support for mobile devices, distributed teams, millennial-friendly user experience, etc.).

How to translate it to engineering, manufacturing and product lifecycle management? The industry has some interesting examples to learn from. AutoCAD was great timing to explore the power of PC computers for CAD drafting in 1980s. Solidworks was also a great example of timing and execution. Yes, people were skeptical if professional 3D MCAD can run on Windows. But it was enough critical mass and interest of engineers to try 3D CAD on Windows.

Arena Solutions (formerly bom.com) was “way-to-early” to introduce cloud software for manufacturing. The solution was developed in 2000. Engineers had no idea what means On-demand, SaaS and other forms of subscriptions. Arena Solutions is 15 years old with many customers today and reported about the growth in enterprise software segment, but I’m sure products and technology is reflecting the fact it was pioneering cloud in PLM. Last “cloud PLM” wave have started 4-5 years ago as manufacturing companies started to recognize the value of cloud tech.

Another example of “different” approach in PLM – Aras Corp. was started as “out-of-the-box modules for project and program management, design and development, sourcing, production, tooling, and quality management”. Navigate here for historical press release. After several years of experiments, in 2007 Aras re-defines itself as open source and subscription based PLM. The notion of timing was significant. I guess it was no point to introduce “open source” PLM in 2000.

What is my conclusion? If your product comes too early and customers are not ready for it, they won’t readily adopt your system. If your product comes too late and there are already a number of different competitors in front of your target audience, you won’t be able to squeeze in. Manufacturing companies proven to be very slow market. Therefore, companies with 10-15 years history are still considered “innovative” by the industry analysts. According to TechCrunch article, the time is just right to bring a different solutions for enterprise companies. It worked for some companies in the past. Jury is out to watch current wave of cloud PLM disruption. Just my thoughts…

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